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Travel agents believe greater competition to be announced today on domestic air routes will see many passengers chopping and changing between rival carriers on same-day trips.
House of Travel retail director Brent Thomas said yesterday that he expected Virgin Blue's plunge into this country's domestic market to affect
radically how customers book their flights.
He said 60 per cent of his customers who flew to Australia had responded to heated competition on transtasman flights by travelling with one airline on their outbound journey and another on their return.
He expected a similar pattern to develop on internal flights once Virgin subsidiary Pacific Blue - which already flies from New Zealand to Australian and various Pacific destinations - muscles in on routes now dominated by Air New Zealand, with a much smaller presence by Qantas.
"What we are likely to see in the domestic market if we get a fully competitive good-frequency offering across a number of routes is a lot more people going up on one airline and coming back on another one."
Mr Thomas said Virgin Blue offered fares as low as $39 as brief opening specials when it began its transtasman operation from Christchurch in 2004, and expected it to do likewise on domestic routes before settling on a more sustainable level.
He disagreed with a claim by Air New Zealand short-haul general manager Norm Thompson that efficient operations achieved by domestic carriers in recent years in this country and Australia had left little room to reduce fares while staying profitable.
"We have noticed an increase in fares generally over the past 12 to 18 months, although to a large extent because of higher fuel costs," Mr Thomas said.
Virgin Blue, which was co-founded by Sir Richard Branson but is now majority-owned by transport operator Toll Holdings, has been guarding details of routes and likely fares before today's announcement in Wellington.
Aviation commentators expect Auckland and Christchurch to be the main beneficiaries of the promised new competition at first.
Chief executive Brett Godfrey has indicated Virgin Blue will start its New Zealand operations with Boeing 737s rather than the smaller 75 to 114-seater Embraer jets it has ordered from Brazil to expand capacity on its Australian routes.
That will rule provincial airports such as Nelson and Hawkes Bay out of the new operation to start with, although 737s can land at Rotorua and Queenstown.
But the airline is not ruling out bringing in Embraers once it has consolidated its Australian operation against competition from Asian-owned newcomer Tiger Airlines.
Mr Thomas believed Dunedin might offer fertile ground for Virgin Blue, given that Qantas does not fly there, and said Hamilton might also be a contender because of its population.
Virgin Blue is likely to have made careful route selection decisions to link a new domestic operation with its transtasman and Pacific routes, rather than relying on its competitors to feed passengers into these.
Although Qantas has left Air New Zealand in a monopoly position between Wellington and Christchurch, after withdrawing from the route in March, aviation commentator Peter Clark does not rate that as a priority gap for Virgin to fill.
But Mr Clark expects Qantas-owned budget airline Jetstar to show its hand soon as a contender for New Zealand domestic routes.
